Augmented Reality is in danger of becoming a hackneyed cliché before it even becomes a widespread technology. Like many other technical capabilities, AR has been around for a long time, and hasn’t really taken off. Does this mean that it won’t? What makes now different?

Well, first of all, technologies do find their times. Though the Newton failed, the iPad was far from doomed. Similarly, Siri has been widely adopted even though her older, more Scandinavian sounding ancestors found only niche usage.

So, is now the time for AR?

Well, since I am leading a company betting that now is the time, let me explain my particular reading of the tea leaves.

To know why now is the time, you have to define why before now was not the time.

In the case of augmented reality, several technical capabilities have to come together in order to get a useful, seamless, compelling, ubiquitous AR experience. Let’s detail them.

Pretty simply, in order to get an AR experience which rivals an immersive game, the camera has to be highly capable, and the users have to be comfortable with its use. In the last two years, the standard setting iPhone has gone from a 1M pixel to an 8M pixel camera. In most cases, Android based high end phones have higher resolution.

Before having real cameras, the best AR experience would be a fairly lame one. This capability is still in less than 50% of smartphones, but that adoption curve is moving quickly.

Requirement #2: Place awareness

Its not enough to be geo-located. That just gives you lat long. The first wave of mobile AR does only this, and ends up being not very useful (look at Layar and Wikitude to see what I mean).

To give Augmented Reality based experiences high relevance to the real world (and what is the point otherwise), the geo info needs to give useful context. What kind of place am I in? Which of my friends has been here? What is interesting about this place?

The availability of Place APIs from Google, Facebook and Foursquare renders the GPS system within a phone capable of setting the necessary context for any kind of interaction with the hidden world. You couldn’t do this less than a year and a half ago.

Requirement #3: Sufficient bandwidth and network availability

To make augmented reality useful, there is a lot of data. To make it seamless and compelling, we have to push enough data down to the phone to add virtual objects and characters to the real world with equivalent (or near) resolution to the camera’s limit. We can be smart about that, but it still requires well-tuned and ubiquitous 3G networks. You simply can’t cache reality.

Requirement #4: Free form (gesture based) UI

Now we’re getting into the less obvious innovations. Interacting with the real world through a 2-D menu or control driven interface is just plain weird. It breaks the illusion of AR being part of reality. In the same way that the iPod,Pad,Phones have each thrived because of a more natural interaction model, AR screams for a touch based, highly flexible interface.

Requirement #5: First class game engine(s) which run(s) on the phone

Augmented reality has to compete with plain reality, and with any of the available virtual experiences. You’re basically trying to get a slice of attention against all the other consumable forms of content.

To make augmented reality seamless, it can’t lack the things we expect from reality, including 3-D, dynamic response, and real time interaction. What is the point in having an augmented reality which is more static and less interesting that the real one?

All of this argues for a true game engine. One which allows for real world physics, dynamic interaction, compelling transition effects, surface management, shadows. As the game engine gets better and better, designers and developers can make the augmentation less obvious, and more compelling.

Today, there are two game engines capable of providing this level of polish, and both have become able to run well on leading smartphones just within the last 12 months.

Requirement #6: Game conversant users

Interacting with the virtual world can be weird. In the old days, you had to “learn” how to play a game. Casual games, and the widespread adoption of gaming, have given us a user base which knows how to figure out control interfaces, try things, and learn, and a designer base which knows how to give visual cues to push users in the right direction without beating them over the head.

Requirement #7: Sharing mechanism

Single player games are ok, but the only real argument for a shared world is to be able to play together in it. Augmented Reality is only augmented if we are sharing the same reality. If I drop an object somewhere, and only I can see it, that’s not a great augmentation.

For the first few pioneers in AR land, we need a way for them to find others, and to pull in their friends. Facebook, Twitter, and Google’s social graph APIs give us a way to build a sharing mechanism in from the ground up.

Requirement #8: Real time graphics and visual recognition on the smartphone.

Many AR technologies rely on visual detection of distinct markers to define the playing field for an augmenting scene. There’s some serious crunch needed to run these algorithms against an HD quality camera view, in real time, on your phone.

SDKs and AR platforms that can handle this have only become widely available in the last 9 months.

Conclusion

So, my contention is that you could not have built compelling AR less than six months ago. To my eye, no one has really hit the design point yet, but the convergence of technologies described above, and the emergence of a user base that is ready to embrace an augmented world is a perfect storm.

I was asked recently by a potential strategic investor why VCs haven’t yet made their AR bets, and this article was born from that. AR hasn’t taken off yet. But it will. And soon.